ISO 19008: Standard Cost Coding System for oil and gas production and - - PowerPoint PPT Presentation

ISO 19008: Standard Cost Coding System for oil and gas production and processing facilities. - Statoil experiences in using a Standard Cost Coding System within cost estimating, experience data, benchmarking and analysis

Rune Hellem, Statoil, Project leader for ISO 19008 and Olav Theodorsen, Statoil, Advisor Benchmarking and analysis

International ISO standardization seminar for the reliability technology and cost area. Statoil Business Centre, Stavanger, Norway, 26 April 2016

2016-02-17 Classification: Open

Content

• Background and status of developing ISO 19008
• ISO 19008 - Standard Cost Coding System (SCCS)

− Users − Codes and relationships

• Experience database

− Collecting data − From SCCS to WBS − Use of Quantitative Experience database

• Benchmarking and Analysis

− Objectives with Benchmarking − Statoil’s Benchmarking Hierarchy

2016-04-26 2 Classification: Open

2016-04-26 3 Classification: Open

2016-02-17 4 Classification: Open

− Operator − Company − Contractor

Users of this International Standard

Both contractor and company can be using the SCCS for classifying their cost data. The appropriate codes to be used internally for cost management and controls can differ from the ones presented to the client for the CTR, but will usually be composed/aggregated according to the requirements of the client.

2016-02-17 5 Classification: Open

ISO 19008 - Standard Cost Coding System (SCCS)

PBS, SAB and COR

• A project independent coding system is necessary to identify cost,

quantities, rates and norms across different projects

• SCCS is not a project specific coding system opposed to WBS coding

which is linked to the contract structure during project execution

• Every cost item will be associated with a scope of work and so can be

classified by each of the three aspects/facets. Each of the classifications in the facet has a numerical or alphabetical hierarchical code.

• The codes are combined to create a complete composite code for the costs.

The nominated order for the composite codes is: PBS, SAB, COR.

2016-02-17 6 Classification: Open

PBS - Physical Breakdown Structure

Hierarchical breakdown

• Defines the physical/functional components of field installations.
• Enables an oil and gas production and processing facility configuration scheme to be classified.
• System/facilities descriptions in PBS are only intended to provide guidelines for cost coding, as the systems/facilities

normally are designed and laid out differently and uniquely for each development project according to technical and functional requirements, construction philosophy and project realisation strategies.

• As a system/facility can cross individual PBS boundaries, there is no exact correlation between a system/facility and PBS.

2016-02-17 7 Classification: Open PBS code Level 3 Code name AAA Drilling area AAB Wellhead and riser area AABA Wellhead area AABB Riser area AAC Process and utilities AAD Living quarter AAE Helideck AAF Flare AAG Deck appurtenances AAH Deck structure

PBS code Level 3 Code name

BCA Civil BCB Buildings BCC Marine (Jetties and shore installations) BCD Structures (piperacks, modules etc.)

PBS code Level 1 Code name

A Offshore installations B Onshore installations

PBS code Level 2 Code name AA Topsides AB Substructures AC Offshore Wells AD Subsea system AE Transport systems AW Offshore wind park PBS code Level 2 Code name BA Process, utilities and product handling BC Civil, Structures, Marine and Buildings BD Transport systems BE Drilling facilities BF Onshore wells BG Temporary facilities BH Infrastructure

SAB – Standard Activity Breakdown

Hierarchical breakdown

• Classifies the activity component of scope of work.
• The alphabetical phase prefix introduces a code for use of SCCS throughout all phases of

a project, from exploration through removal of facilities.

2016-02-17 8 Classification: Open

SAB code Level 2 Code name 41 Onshore construction 42 Atshore construction 43 Inshore construction 44 Offshore construction SAB code Level 2 Code name 51 Land based installation 52 Marine operations 53 Logistics SAB code Level 3 Code name 211 Pre-execution engineering 212 Detail design engineering 213 Construction / fabrication / installation engineering 214 Follow on engineering SAB code Level 1 Code name

1 Management 2 Engineering and procurement 3 Equipment and Bulk Supply 4 Construction 5 Installation, Transport and Logistics 6 Other activities 7 General activities 8 Well Operations

SAB code Level 2 Code name 21 Engineering 22 Procurement

SAB – phase prefix E Exploration A Appraisal D Development P Production S Shutdown and decommissioning R Removal

COR – Code Of Resource

Hierarchical breakdown

• Classifies all project resources according to the type of contract/resource that is involved in

the activity and has an associated set of rates.

• Classifies the complete scale of resources involved in developing offshore and onshore

facilities.

2016-02-17 9 Classification: Open

COR code Level 3 Code name ERC Miscellaneous mechanical equipment ERD Drivers and power transmissions ERF Heaters, boilers, furnaces and flares ERH Heat transfer equipment ERK Compressors, blowers and expanders ERM Material and product handling equipment ERN Mechanical equipment – solids ERP Pumps ERT Storage tanks/containment equipment – atmospheric ERV Vessels and columns – pressurised ERX Miscellaneous package units

COR code Level 1 Code name COR code Code name

A General costs E Equipment B Bulk materials K Engineering personnel R Engineering overheads L Direct labour M Indirect labour C Construction overheads H Company personnel Q Company personnel overheads S Unit work X Marine operations and logistics Y Land based plant and equipment

COR code Level 2 Code name EA Architectural equipment ED Drilling equipment EE Electrical equipment EG Heating, ventilation and air conditioning (HVAC) equipment EJ Instrumentation equipment ER Mechanical equipment ES Safety/escape and firefighting equipment ET Telecommunication equipment EU Subsea equipment EV Mooring and marine equipment EY Transfer and control equipment

Is this much?

• Johan Sverdrup P1 platform

18 000 mill. NOK

• Hyme subsea project

2 000 mill. NOK

• Statpipe Gas Processing Plant (Kårstø)

8 000 mill. NOK

2016-02-17 10 Classification: Open

Quantitative experience data stored in Statoil’s Experience Database

2016-02-17 Classification: Open

The Experience data Process

“The Statoil brain”

Project phase initiation Project phase closing

Gather experience Share experience

2016-02-17 12 Classification: Open

Project Transfer of Experience data

Experience Database Project Control Database

DG2 DG3 MCE0 CCE1 CCE2 CCEn

As-built

Estimation

Experience group

2016-02-17 13 Classification: Open

From SCCS coded Estimate to WBS

Main Contract Packages WBS structure Data Input level Estimate

• Cost estimate established by estimating department
• Restructure cost estimate according to work packages for follow up in execution phase

SCCS PBS SAB COR Description AA 1 H Pre-DG3 Management AA 211 K Pre-DG3 Studies AA 1 H Management AA 211 K FEED AA

• Incl. mhr-rate

AA 212 K Detail Engineering AA 31 E Equipment AA 32 B Bulk AA 4141 L Prefab. AA 4442 L Installation work AA 5231 XC Lifting AA 447 L Commiss. AA 12 HFB Management Statoil Project X (Example) Platform Modifications Heavy Lift Concept Development Contractor 1 Statoil Project Management Statoil FEED Feed Contractor Heavy Lift Contractor Preliminary Detail engineering EPC ( I) Contractor Procurement Fabrication Installation Comm.assist. N/A Commissioni ng / testing Statoil

2016-02-17 14 Classification: Open

Storage of experience data by Project and PBS

Example: Gjøa development project

2016-02-17 15 Classification: Open

Amount of Experience data (per April 2016)

2016-02-17 16 Classification: Open

Facility Category No.

Topside Modifications 205 Platform 138 Subsea 122 Onshore Facilities 111 Transport Pipeline 90 Wells 72 Offshore Storage and Offtake System 12 Offshore Cable-Umbilical 12 Offshore Bridge 8 Offshore Fibre Optic Cable 8 Onshore Cable-Umbilical 7 Cessation Platform 4 Cessation Subsea 2

Quantitative data available in Database

• Project cost and quantities – at a detailed level
• Cost plan (investment profile)
• Currency shares from contracts
• Design data
• Overall quantities

(weights, man-hours etc.)

• Main Schedules & milestones
• Progress curves

2015-06-04 17 Classification: Internal

Benchmarking and Analysis

2016-02-17 Classification: Open

Benchmarking

$/boe Metrics by facility category Component cost

• n discipline level

Business case cost efficiency Concept cost efficiency Key cost drivers

LEVEL 1 LEVEL 2 LEVEL 3

• Capacity vs. reserves
• CAPEX vs. reserves
• Facilities & wells
• Facilities only
• Total platform
• Jacket/FPSO/Semi/etc.
• Topsides/substructure
• Pipelines
• Subsea
• Onshore
• Norms and rates
• Unit cost
• Material
• Engineering
• Construction
• Etc.

Why benchmarking:

• Decision support
• Estimate calibration
• QC of estimates
• Challenge technical
• Communication

2016-02-17 19 Classification: Open

Benchmarking

What we try to avoid: What we hope to achieve: Where we usually end up:

2016-02-17 20 Classification: Open

Benchmarks - Level 1

CAPEX/boed vs. Recoverable reserve (Mboe) (Stand alone vs. Subsea tie-back field development)

2016-02-17 21 Classification: Open

Benchmark Level 2 – Topside cost vs. weight All platforms, All regions

2016-02-17 22 Classification: Open

Benchmark Level 2 - Topside cost vs. weight

Semi platforms – Norwegian Continental Shelf (NCS)

2016-02-17 23 Classification: Open

Benchmarks – Level 3

Norms & Rates - Input to Estimation tools

• Norms (Manhours / tonnes)

– Engineering (by discipline) – Onshore/Atshore Construction (by discipline) – Offshore Construction (by discipline)

• Material rates (NOK/kg, NOK/m, etc.)

− Equipment (by system / COR / package) − Bulk (by discipline)

• Manhour rates (NOK / Manhour)

− Engineering − Onshore/Atshore Construction − Offshore Construction − Company Management − Project Completion

• Other Norms and rates

− Detailed Piping norms and rates (by category, matr. quality & dimension) − Marine Operations (day rates per vessel)

2016-02-17 24 Classification: Open

ISO 19008: Standard Cost Coding System for oil and gas production and processing facilities - Statoil applications Rune Hellem and Olav Theodorsen, Advisors Cost estimating www.statoil.com

2016-02-17 25 Classification: Open

Q & A